NEW YORK
— With Amtrak's flagship Acela service sidelined until at least the summer, attention is now being focused on the long-term future of the nation's struggling passenger rail service.

President Bush wants to do away completely with the company's $1.2 billion federal subsidy, breaking up and privatizing Amtrak, which would shift responsibility for rail service to the states. Amtrak's advocates say that the railroad continues to struggle precisely because Washington has never invested enough in it. They say that breaking up the company now would only doom passenger rail in the country - not a wise move with gas prices spiraling and the aviation system in crisis.

And therein lies the crux of the debate under way on Capitol Hill: Is passenger train service a national necessity that should be subsidized to ensure its survival as the nation does for its highways and aviation systems, and as the majority of the world does for its rail services? Or should passenger rail in the United States be a private, profitmaking business that is self-sustaining?

Amtrak's advocates note that there are only a few passenger rail lines in Japan and New Zealand that actually make money. Even India, which boasts about its railroads, subsidizes its system to the tune of $3.4 billion annually, almost three times as much as Washington underwrites Amtrak.

But privatization advocates argue that Amtrak is actually hamstrung by its congressional funding, which has earned the necessary votes only by requiring the railroad to keep long, unprofitable routes running to far-flung Western states. These advocates contend that shifting responsibility to the states would spur investment in the routes that are profitable, ending the politically inspired unprofitable ones. They say this, in turn, could create a stronger rail system - albeit one that may not be national in scope.

"It is correct for the Bush administration to put pressure on Congress and Amtrak to come up with a better answer. If we're going to spend a billion dollars a year, we want something for it," says Robert Gallamore, director of the Northwestern University Transportation Center in Evanston, Ill. "At the same time, my friends tell me that I'm crazy to think that state compacts could ever be successful. If the local city council can't get together to agree on how to build a local library, how likely is that that several states will be able to agree on [how to pay for a rail line?]"

At a hearing on Capitol Hill Thursday, Amtrak released its own strategic vision for the future. Key to its success, according to David Laney, chairman of Amtrak's board, is creating a federal-state match for improving rail service, very similar to the kind of matching grants that have helped keep the nation's highways and airports in good repair. Its ideal would be 80 percent federal, and 20 percent state. The theory is that this will spur states to invest in improving their own rail infrastructures.

The line that needs the most attention currently, according to Mr. Laney, is the Northeast Corridor, which now generates much of Amtrak's revenues. The tracks are in such poor repair that even when the high-speed Acela trains were running, it couldn't reach its top speed of 150 miles per hour.

Some critics believe that Acela's current problems, tiny cracks in its break discs, could have been exacerbated by the poor condition of the tracks. On learning of the problem, Amtrak quickly pulled its Acela trains out of service.

But Laney and other Amtrak officials make it clear that improving track conditions in other parts of the country as well is central to creating a more efficient and profitable passenger rail nationally.

"The future of intercity passenger rail, if we can pull this off, is going to be much brighter," says David Gunn, Amtrak's president and CEO.

The Bush administration's proposal to eliminate funding for Amtrak came in for harsh criticism at the hearing, even from the subcommittee chairman Trent Lott (R) of Mississippi, who referred to the "ridiculousness of that proposal."

"I was stunned and disappointed that such a proposal was set up here by this administration," he said.

Before the hearing, Senator Lott also made it clear he believes Amtrak has to be reformed, but not at the expense of states who have rail systems that are unprofitable.

"Residents of states like Mississippi are not going to subsidize the ride exclusively for folks in the Northeast Corridor," he said. "If Americans nationwide are going to pay for Amtrak, then it must be preserved as a true nationwide system."

That highlights yet again the challenges facing Amtrak: It's expected to be profitable at the same time it's expected to keep running very unprofitable lines. Some analysts call that its Catch-22. Others contend that any talk of a national rail system as being self-sustaining is "wrongheaded."

"I was aghast when Washington started talking about self-sustainability [for Amtrak]," says Martin Robins, director of the Voorhees Transportation Policy Institute at Rutgers University in New Brunswick, N.J. "That got us off completely on the wrong foot because the issue is improperly framed, and so it makes it difficult to find proper solutions."

That vast ideological gulf in funding perspectives was also on prominent display at Thursday morning's hearing. Jeffrey Rosen, the Bush administration's general counsel to the Department of Transportation, noted that "the federal taxpayers have infused more than $29 billion during the last 34 years as Amtrak has lurched from crisis to crisis without ever achieving a stable and viable business model." Whereas Sen. Frank Lautenberg (D) of New Jersey noted that this is less than a billion dollars a year - a paltry sum when compared with, say, Germany, which spends an estimated $9 billion of taxpayers' money a year on its rail service.

In the end, no analysts interviewed thought Congress would eliminate Amtrak's funding completely. The open questions, they say, are how Amtrak will be changed and whether Congress is willing to provide the kind of funding needed to improve infrastructure and operate efficiently.

"Somebody with some smarts has to decide what Amtrak is supposed to do. They've been fumbling with it for 30 years," says George Smerk, professor emeritus of transportation at Indiana University at Bloomington. "It has a good beginning to build on, and it could have a good future."